Contracts & Disputes: India rules for foreign companies

Contracts that hold up in India

Indian courts respect party choice of law and arbitration in commercial contracts with a foreign element. The arbitration clause should name the seat, the rules, the number of arbitrators and the language; vague clauses lead to satellite litigation.

Agreements executed abroad and later brought into India must be stamped within the prescribed time, failing which they may not be admissible as evidence until duty and penalty are paid.

Intercompany agreements deserve the same care as third-party contracts: they support transfer pricing, GST, withholding and PE positions, and are the first documents requested in an audit.

Drafting points

• One governing law per contract.
• An arbitration clause with a clear seat and rules.
• Indian stamp duty on agreements brought into India.
• Intercompany agreements that support transfer pricing.

Checklist

• Governing law and seat
• Arbitration rules and language
• Stamp duty on execution or entry
• Intercompany agreements signed
• Anti-corruption clauses with agents

Common mistakes

• Unclear arbitration clauses
• Unstamped agreements
• No intercompany agreement
• Agents without anti-corruption terms

How this applies to your country

• USA to India en-US
• UK to India en-GB
• Japan to India en-JP
• Germany to India en-DE
• Singapore to India en-SG
• Australia to India en-AU
• China to India en-CN
• Hong Kong to India en-HK
• Russia to India en-RU
• Spain to India en-ES
• France to India en-FR
• UAE to India en-AE

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